Suppose the Banking System Has $100,000 in Outstanding Deposits and Actual

question 38

Multiple Choice

Suppose the banking system has $100,000 in outstanding deposits and actual reserves of $35,000. If the required reserve ratio is 20 percent, the maximum amount the banking system can add to the money supply is:

• A)$15,000.
• B)$75,000.
• C)$175,000.
• D)$500,000.

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